/>How often have you heard phrases like "tax cuts for the rich" hurled as epithets by liberal activists?
It's like a mantra. Every time a tax cut is proposed, liberals go apoplectic about the supposed injustice of it all. It's as if conservatives were suggesting sending out the Sheriff of Nottingham to shake down the peasants to subsidize the lavish lifestyles of the rich and famous.
Well, I have news for you: it's the liberals who are shaking down the peasants, and their "socially just" policy of progressive income taxation is aimed squarely at middle-class people working their way up the economic ladder, not at the "rich" who supposedly pay the most under this system.
Liberals have it exactly wrong, as usual.
Let's examine the premise of progressive income taxes. It's pretty simple, really: people with lower incomes pay a smaller share of their income than people who make more money. The lowest Federal income tax rate, for single people making up to $7550, is 10%. The highest rate, for single people making over $336,550 is 35%. There are basically 6 tax brackets.
So the further a person climbs up the economic ladder, the harder the tax code hits them. Liberals argue that this is "tax fairness;" low taxes for the poor, higher taxes for the rich.
Most arguments about the merits of progressive taxation center on the economic idiocy of this policy. By taxing higher incomes, the government discourages the most productive members of society from doing what they do best: producing. And any economist worth his salt will tell you that the more productive any members of society are the better off we all will be in the long run.
But my beef with progressive taxation goes deeper than the simple stupidity of taxing income in this way. I believe that progressive taxation is not just stupid, but fundamentally unjust. And whether or not you believe that the "wealthy" should pay a higher percentage of their income in taxes—and that in itself is a morally dubious proposition—progressive income taxes don't accomplish that goal. Instead, they punish lower- and middle-class wage earners, while leaving many wealthy folks alone.
How? It's pretty simple really. While liberals say income taxes are aimed at the "rich," that is simply wrong.
Income taxes are levies on income, not wealth. Rich people are already rich. If they are earning an income as well, then more power to them. But if you are really "rich," you don't need to work. So an income tax, far from being a tax on "the rich," is really a tax on people who work for a living.
So what is the effect of progressive income taxes?